- The California legislature passed more than 800 energy bills potentially adding to the energy misery its residents face.
- California has the nation’s highest gas and diesel prices and rising electricity prices, and these bills will add to the burden.
- Included among this year’s bills is one requiring some firms doing business in the state to report their direct and indirect carbon dioxide emissions, and another installing solar panels along the state’s highways that would be leased to utility companies or private developers.
- These bills will increase energy prices on Californians and further ignite inflation for consumers.
The California legislature has passed more than 800 energy bills that cover a range of energy-related topics, including offshore wind, solar installations along highways, grid modernization, long-duration battery storage, geothermal power plants and addressing orphaned oil wells. Further, the state has a climate disclosure bill to make major companies publicly disclose their carbon dioxide emissions that could have national repercussions. California also has the highest gasoline and diesel prices, and from January 2020 through July 2023, the state’s electricity pricing inflation rate was 271 percent higher than the general inflation rate of 16.9 percent.
Sample of Energy Bills
Assembly Bill 1373, would facilitate the development of offshore wind projects near Morro Bay and Humboldt County. By 2045, California expects to get 100 percent of its electricity from carbon-free sources, and offshore wind is expected to contribute 25,000 megawatts towards this goal. AB 1373 would allow the California Department of Water Resources to purchase energy from expensive projects and sell it to utilities. Additionally, the bill allocates funds for monitoring the impacts of offshore wind projects.
Another bill, Senate Bill 49, would require the California Department of Transportation to develop a plan for installing solar panels along the state’s highways that would be leased to utility companies or private developers. Senate Bill 619 plans to modernize California’s aging power grid by streamlining the regulatory process for certifying transmission projects. Assembly Bill 1167 addresses the issue of orphaned oil wells in the state, which currently lack viable owners or operators. AB 1167 would require full bonding for plugging and remediating these wells when transfers of ownership occur despite the state already having measures in place.
Climate Disclosure Bill
The climate disclosure law, SB 253, will require about 5,000 companies to report the amount of greenhouse gas emissions that are both directly emitted by their operations and the amount of indirect emissions coming from such activities as employee business travel, waste disposal and supply chains. The law applies to public and private businesses that make more than $1 billion annually and operate in California. Because the state is the world’s fifth-largest economy, California often sets the trend for the nation, with other states following in its footsteps, and many of the affected businesses are global corporations. The companies would be required to disclose their emissions starting in 2027. This California legislation goes beyond a measure proposed by the Securities and Exchange Commission, which would require only publicly-traded companies to disclose their emissions.
Many of the affected businesses include oil and gas companies like Chevron, major financial institutions like Wells Fargo and global companies like Apple. The new measure would be paired with another new law that requires companies with revenue over $500 million to report their climate-related risks, although they would not have to disclose their specific emissions. According to Robert Stavins, director of the Environmental Economics program at Harvard, “It could be the case that a company that is valued at $1 billion has $35 of activity in California but is nevertheless affected.”
Opponents see compliance as expensive and onerous, particularly the requirement that businesses accurately track and measure all emissions. For example, clothing manufacturers worry that they would have to report the emissions associated with growing, weaving and transporting textiles, in addition to reporting the direct emissions from their garment manufacturing plants. Moreover, it increases legal jeopardy for companies who may become targets of litigation about the veracity of their reporting.
The California Chamber of Commerce lobbied against it, and the governor’s state finance department is opposed, saying the measure would result in new costs that are not currently in the state spending plan. The California Chamber of Commerce called the legislation “a costly mandate that will negatively impact businesses of all sizes in California and will not directly reduce emissions.” Climate activists, however, say the bill will help cut emissions because when investors are made aware of a company’s emissions, they may choose to steer their money elsewhere. Some companies may simply forego doing business in California altogether, especially if they do little business there now.
California’s Electric Vehicle Law
California has a requirement that every new car in the state be all-electric by 2035, phasing out the sale of all gas-powered personal cars. However, a bipartisan bill in the U.S. House of Representatives, HR 1435, “Preserving Choice in Vehicle Purchases Act,” would ban states from telling citizens what vehicles they are allowed to buy and it would rescind federal approvals that were issued since last year that allows states to effectively ban gasoline vehicles. The bill passed by a bipartisan majority of 222 to 190.
When the Clean Air Act was passed by Congress in the 1960s, it allowed California to pass its own clean car rules that were stricter than federal rules, so long as the Environmental Protection Agency (EPA) approved the rules first. California was given this allowance in the law because LA County was extremely smoggy due to emissions from 1960s vehicles. However, Los Angeles has not had a smog problem for more than 40 years due to vehicle emissions standards. Since that portion of the Clean Air Act has not been rescinded, however, it has allowed the environmentalists in California’s state government to pursue vehicle regulations. Last year, Biden’s EPA reinstated a waiver that allows California to impose new rules limiting vehicular air emissions. Immediately after that, the California Air Resources Board passed a rule to ban the sale of gas-powered cars by 2035.
Because China controls more than 80 percent of the supply chain required to build electric cars, it will be the clear winner. If the nation goes along with California’s mandate and makes it federal, most American auto jobs would be shipped overseas. Car companies would have no reason to keep jobs in the United States if the cost of making an electric vehicle soars due to having to import the materials from China. The White House is threatening to veto HR 1435, claiming that the bill would “restrict the ability of California and its citizens to address its severe air pollution challenges.” It is no wonder that the United Auto Workers union is striking.
Conclusion
California has continued its energy and climate pursuits with increased activity this year. Unfortunately, other states follow in its footsteps, and President Biden is also very much in agreement with the rules and laws the state is undertaking. All of the legislative provisions including renewable energy, electric car mandates, and emission disclosure rules will just make living in the state more expensive and drive more people out. If President Biden follows suit, the misery among Americans will be wide spread.
